The Swiss Law on Accounting and Financial Reporting
Illustrative financial statements of an Industry Ltd, a Holding Ltd and a Non-Profit Foundation (including disclosure checklist)
kpmg.ch Table of Content
01 Preliminary remarks and assumptions 03
02 Illustrative example of annual financial statements of Industry AG, Zurich 04 Balance sheet 05 Income statement 06 Cash flow statement 07 Notes 08
03 Illustrative example of annual financial statements of Holding Ltd, Zurich 16 Balance sheet 17 Income statement 18 Possible alternative: income statement in vertical 19 Notes 20
Illustrative example of annual financial statements of Non-Profit 04 Foundation, Zurich 26
Balance sheet 27 Income statement 28 Notes 29
05 Appendix 32 Appendix: Disclosure checklist 33
3rd edition Status: February 2020
2 KPMG | The Swiss Law on Accounting and Financial Reporting Illustrative financial statements
Preliminary remarks and assumptions
On 23 December 2011, the Swiss Parliament enacted the new law on accounting and financial reporting, which is included in the 32nd title of the Swiss Code of Obligations. The previous accounting provisions from the Company Law have been repealed accordingly. The new and still applicable Law on Accounting and Financial Reporting became effective as at 1 January 2013. The new provisions became applicable for the first time to stand-alone financial statements for the 2015 financial year, and as of 2016 for consolidated accounts, respectively.
This KPMG publication aims to support companies in applying the Swiss Law on Accounting and Financial Reporting when presenting the annual financial statements (of a stand-alone entity). By using three examples, we will show how the provisions of Articles 959 – 961b CO may be implemented in practice.
The following illustrative financial statements are purely fictional and meant for illustrative purposes only. Not all possible situations can be covered which is why they do not claim to be complete. Any similarities with existing companies are purely coincidental. Therefore, the information contained in these illustrative financial statements cannot necessarily be applied to the circumstances of a specific company. In individual cases, the complete text of the Swiss Law on Accounting and Financial Reporting should be consulted.
The following assumptions apply to the illustrative financial statements:
Industry Ltd Holding Ltd Non-Profit Foundation • The fictitious, non-listed company • The fictitious, listed company • The fictitious Non-Profit Industry Ltd controls other Holding Ltd controls other Foundation is subject to a limited companies and prepares its companies and prepares its statutory examination only; consolidated financial statements consolidated financial statements accordingly, the provisions in accordance with principles of in accordance with Swiss GAAP applicable to larger entities are orderly financial reporting (the so- FER (not presented in this not applicable in this case. called “Swiss CO consolidation” brochure). according to Article 963b(3) CO, • By law, the company is subject to which is not included in this an ordinary audit. As Holding Ltd brochure). has prepared its consolidated • By law, the company is subject to financial statements in accordance an ordinary audit and must make with a recognized accounting additional disclosures in the notes standard, it has decided to forego to the financial statements and presenting additional information provide a cash flow statement in the notes and a cash flow as stipulated in the regulation for statement as per Article 961d(1) larger entities (Articles 961a - 961b CO. CO). The management report also required for larger entities (Article 961c CO) is not part of the financial statements and therefore not presented in these illustrative financial statements.
The illustrative notes to the financial statements contain a selection of statutory minimum disclosures. However, depending on the entity-specific facts and circumstances, it may be appropriate or required to provide additional explanations. Moreover, subtotals and appropriate descriptions have been used for the illustrative income statements and cash flow statement.
3 Illustrative annual financial statements of Industry Ltd, Zurich
4 KPMG | The Swiss Law on Accounting and Financial Reporting Illustrative financial statements
Balance sheet Article 959c(2)(1) CO
ASSETS
CHF 1,000 Notes 31.12.2018 31.12.2017 Article 959a(1) CO
Cash and cash equivalents 8,444 7,111
Securities listed on a stock exchange 2,325 2,342
Trade accounts receivable 2.1 20,956 19,980
Other short-term receivables 4,511 5,089
Inventories and non-invoiced services 2.2 31,178 28,178
Prepaid expenses and accrued income 1,756 1,800
Total current assets 69,170 64,500
Financial assets 1,889 1,733
Investments 2.3 3,000 3,000
Property, plant and equipment 2.4 76,542 62,000
Intangible assets 2.5 1,703 1,178
Total non-current assets 83,134 67,911
TOTAL ASSETS 152,304 132,411
LIABILITIES AND SHAREHOLDERS’ EQUITY
CHF 1,000 Notes 31.12.2018 31.12.2017 Article 959a(2) CO
Trade accounts payable 2.6 24,289 20,689
Short-term interest-bearing liabilities 15,324 6,018
Other short-term liabilities 2.7 5,000 10,289
Short-term provisions 1,431 1,580
Accrued expenses and deferred income 9,089 8,667
Total short-term liabilities 55,133 47,243
Long-term interest-bearing liabilities 2.8 41,289 41,156
Provisions 3‘147 3‘398
Total long-term liabilities 44,436 44,554
Total liabilities 99,569 91,797
Share capital 2.9 17,000 14,500 Legal capital reserves • Reserves from capital contributions 2.9 6,500 0 • Other capital reserves 6,589 6,589 Legal retained earnings • General legal retained earnings 2.10 10,000 10,000 • Reserves for treasury shares 460 460 Voluntary retained earnings • Available earnings – Results carried forward 7,653 7,129 – Profit for the year 4,600 1,980 Treasury shares 2.10 – 67 – 44
Total shareholders’ equity 52,735 40,614
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 152,304 132,411 5
Income statement
Article 959b(2) CHF 1,000 Notes 2018 2017 CO Revenue from sale of goods and services 2.11 166,644 137,511
Other operating income 2,389 3,411 Change in inventory of finished goods and work in progress as 1,156 –1,067 well as non-invoiced services Total operating income 170,189 139,855
Raw materials and supplies –80,978 –60,844
Personnel expenses –41,844 –38,644
Other operating expenses –28,467 –27,133 Depreciation and impairment losses on property, –11,232 –10,543 plant and equipment Amortization on intangible assets –168 –102
Operating result 7,500 2,589
Financial income 441 734
Financial expenses –1,102 –1,226
Non-operating income 2.12 601 598
Non-operating expenses 2.12 –312 –493
Extraordinary, non-recurring or prior period expenses 2.13 –350 0
Profit for the year before taxes 6,778 2,202
Direct taxes –2,178 –222
Profit for the year 4,600 1,980
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Cash flow statement
CHF 1,000 Notes 2018 2017 Article 961b CO Disclosure Profit for the year 4,600 1,980 requirement for larger entities Amortization and impairment losses on non-current assets 11,400 10,645
Other non-cash (income)/expenses –10 111
(Gains)/losses arising from disposals of non-current assets –37 18
Changes in securities listed on a stock exchange 17 –1,953
Changes in trade accounts receivable –976 1,090
Changes in inventories and non-invoiced services –3,000 1,622 Changes in other short-term receivables, prepaid expenses and 622 –600 accrued income Changes in trade accounts payable 3,600 1,556 Changes in other short-term liabilities, accrued expenses and –4,867 643 deferred income Changes in provisions –400 –1,333
Cash flows from operating activities 10,949 13,779
Acquisition of property, plant and equipment –26,137 –9,267
Proceeds from sale of property, plant and equipment 400 0
Acquisition of financial assets –525 –1,525
Proceeds from sale of financial assets 369 0
Acquisition of intangible assets –693 –156
Cash flows from investing activities –26,586 –10,948
Proceeds from issue of share capital (including share premium) 2.9 9,000 0
Distribution of profits to shareholders (dividends) –1,456 –1,200
Acquisition of treasury shares 2.10 –23 0
Proceeds from sale of treasury shares 2.10 0 633 Cash inflows/(cash outflows) from short-term interest-bearing 9,306 278 liabilities Cash inflows from long-term interest-bearing liabilities 133 200
Cash outflows from long-term interest-bearing liabilities 0 –500
Cash flows from financing activities 16,960 –589
Change in cash and cash equivalents 1,323 2,242
Reconciliation:
Cash and cash equivalents as at 1 January 7,111 4,721
Exchange rate differences on cash and cash equivalents 10 148
Balance in cash and cash equivalents as at 31 December 8,444 7,111
Change in cash and cash equivalents 1,323 2,242
7 Notes
Article 959c(1) 1. PRINCIPLES and (1) CO
Note: The accounting principles highlighted in blue are alternative wordings for cases where accounting policies with respect to recognition, presentation or valuation deviate from the ones chosen by Industry Ltd. These alternative accounting principles have not been further considered in the present illustrative financial statements. However, they could trigger additional disclosures.
1.1 General aspects These annual financial statements were prepared according to the principles of the Swiss Law on Accounting and Financial Reporting (32nd title of the Swiss Code of Obligations). Where not prescribed by law, the significant accounting and valuation principles applied are described below. It should be noted that to ensure the company’s going concern, the company may create or release hidden reserves.
1.2 Inventories and non-invoiced services Inventories and non-invoiced services are recorded at acquisition or manufacturing costs: If the net realizable value at the balance sheet date is lower than acquisition or manufacturing costs, net realizable values are used. The company has furthermore made use of a general value adjustment, admissible under tax law. Acquisition costs are calculated using the weighted average cost method, manufacturing costs using standard costs.
Possible alternative accounting principle: Inventories are valued at acquisition or manufacturing costs - or if this is lower, at net realizable value (lowest value principle). The acquisition or manufacturing costs are calculated with the FIFO method (first in – first out).
Non-invoiced services are valued at manufacturing costs (standard full cost of own work) or at acquisition cost (work provided by third parties). If the net realizable value at the balance sheet date is lower than acquisition or manufacturing costs, net realizable values are used.
Longer-term construction contracts are accounted for according to the POC (percentage of completion) method, provided the relevant conditions are met. With the POC method, not only the acquisition and manufacturing costs are recorded but also a share of profits in accordance with the percentage of completion, provided the realization is sufficiently secure. The percentage of completion is calculated with the costs incurred so far in comparison to the expected overall costs (cost-to-cost). Should the conditions for the POC method not be met, the project is accounted for using the completed contract method whereas it is only recognized in the income statement once the delivery and performance risks have been passed on to the client. Expected losses are fully provisioned immediately in both the POC as well as the CC method.
Article 960b(1) 1.3 Securities and financial assets and (2) CO Securities with a short-term holding period are valued at their quoted market price as at the balance sheet date. No valuation adjustment reserve was created. Financial assets include securities with a long-term holding period that have no quoted market price or no other observable market price, as well as loans to employees. Financial assets are valued at their acquisition cost adjusted for impairment losses.
Possible alternative accounting principle: Securities with a short-term holding period are valued at their quoted market price as at the balance sheet date. In order to account for fluctuations in value, the entity records a valuation adjustment reserve which amounts to the difference between the market price as at balance sheet date and lower historical acquisition cost.
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1.4 Property, plant and equipment Property, plant and equipment (PPE) is valued at acquisition or manufacturing costs less accumulated depreciation and impairment losses. With the exception of land, property, plant and equipment (PPE) is always depreciated using the straight-line method. As soon as there are indicators that carrying values may be overstated, these are reviewed and, if necessary, adjusted.
1.5 Intangible assets Intangible assets generated internally are capitalized if they meet the following conditions cumulatively at the date of recognition: • the intangible assets generated internally are identifiable and controlled by the entity; • the intangible assets generated internally will generate a measurable benefit for the entity for more than one year; • the expenses incurred with the creation of the intangible assets generated internally can be recognized and measured separately; • it is likely that the resources required to complete and market or use the intangible assets for the entity’s own purposes are available or will be made available.
Intangible assets are amortized using the straight-line method. As soon there are indicators that carrying values may be overstated, these are reviewed and, if necessary, adjusted.
1.6 Treasury shares Treasury shares are recognized at acquisition cost and deducted from shareholders’ equity at the time of acquisition. In case of a resale, the gain or loss is recognized through the income statement as financial income or financial expense, respectively.
Possible alternative accounting principles: • Treasury shares are recognized at acquisition cost and deducted from shareholders‘ equity at the time of acquisition. In case of a resale, the gain or loss incurred is allocated or charged to the voluntary retained earnings.
• Treasury shares are recognized at acquisition cost and deducted from shareholders‘ equity at the time of acquisition. In case of a resale, the gain or loss incurred is allocated or charged to the legal capital reserves.
1.7 Revenue from sale of goods and services Sales are recognized when risks and rewards are transferred to the client or a service has been provided. Normally, this is the case upon delivery of the goods. In cases where Industry Ltd is also responsible for the delivery and installation of delivered goods, revenue recognition only takes place once the installation has been completed.
Possible alternative accounting principle: Revenue from services is recorded as at invoicing. The service is invoiced once it has been rendered, at the latest at the end of each quarter.
9 1.8 Share-based payments Should treasury shares be used for share-based payment programs, the difference between the acquisition costs and any consideration paid by the employees at grant date is recognized as personnel expenses. Shares awarded to employees by capital increase are accounted for as follows: the amount paid by the employees for the nominal value of the shares awarded is recorded in share capital, while the paid amount exceeding the nominal value is considered to be a share premium and is recorded in legal capital reserves.
Possible alternative accounting principle: Should Board members and employees receive treasury shares as part of a share-based compensation program, the difference between the acquisition costs and any consideration paid by the employees at grant date is recognized as personnel expenses. These expenses are allocated across the entire vesting period if the actual shares are only handed over at a later date and if it depends on the employee‘s remaining with the company for a set period. Should the share-based compensation be related exclusively to the employee‘s performance during the year of the allocation, the entire expense is recorded in that year, regardless of the actual transfer date of the shares.
1.9 Leases Leasing and rental contracts are recognized based on legal ownership. Therefore, any leasing or rental expenses are recognized as expenses in the period they are incurred; however, the leased or rented objects themselves are not recognized in the balance sheet.
Possible alternative accounting principles: Leasing transactions are recognized in the balance sheet on a substance over form basis. For this, leasing agreements and rental leases are classified as finance leases if essentially all of the risks and benefits related to the ownership of the leased object have been transferred to Industry Ltd as the lessee. All other leasing transactions are considered operating leases.
For finance leases the value of the leased or rented object is capitalized in property, plant and equipment (PPE) at the beginning of the contract; the same amount is recorded as leasing liability. The depreciation of PPE and the amortization of the leasing liabilities then take place over the leasing period.
For operating leases, the rental and leasing rates paid are directly recognized in the income statement when they become due.
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2. INFORMATION ON BALANCE SHEET AND INCOME STATEMENT ITEMS Article 959c(1)(2) CO 2.1 Trade accounts receivable
CHF 1,000 31.12.2018 31.12.2017
Receivables from third parties 8,884 7,585
Valuation adjustments –1,237 –1,397
Receivables from shareholders 325 342 Article 959a(4) CO Receivables from companies in which the entity holds an investment 9,309 9,240 Article 959a(4) CO Receivables from other group companies 3,675 4,210
Total 20,956 19,980
2.2 Inventories and non-invoiced services
CHF 1,000 31.12.2018 31.12.2017
Raw materials and supplies 5,670 4,893
Work in progress 22,718 21,329
Finished goods 14,605 14,636
Non-invoiced services 1,318 1,520
Valuation adjustments –13,133 –14,200
Total 31,178 28,178
2.3 Investments
Share in voting and capital Company Domicile Capital in 1,000 rights, in % Article 959c(2)(3) CO 31.12.2018 31.12.2017 31.12.2018 31.12.2017
Industry Finance AG Zurich CHF 100 CHF 100 100 100
Betatechnik AG St. Gall CHF 1,000 CHF 1,000 75 75
Industrie-Productions SA Lausanne CHF 1,000 CHF 1,000 100 100
Omega AG Vienna EUR 2,000 EUR 2,000 20 20 20 20 Delta AG Salzburg EUR 2,000 EUR 2,000 (indirectly (indirectly held) held)
2.4 Property, plant and equipment
CHF 1,000 31.12.2018 31.12.2017
Operating properties 14,805 15,120
Non-operating properties 4,900 5,300
Land reserve 5,600 0
Installations and equipment 42,324 33,702
Vehicles 8,913 7,878
Total 76,542 62,000
11 Article 959c (2)(12) In the course of the relocation of a part of the production from Zurich to Winterthur in 2017 and 2018, CO impairment losses on operating properties and installations and equipment in the amount of CHF 2,910k and CHF 2,224k, respectively, had to be recognized.
In 2018, the company acquired a plot of land in Winterthur next to the production facilities, which is currently held as a land reserve.
2.5 Intangible assets Intangible assets mainly consist of software (developed by third parties or acquired) and capitalized costs of internally generated and patented production methods.
2.6 Trade accounts payable
CHF 1,000 31.12.2018 31.12.2017
Accounts payable due to third parties 16,934 14,302
Article 959a(4) Accounts payable due to companies in which the entity holds an investment 4,919 3,286 CO Accounts payable due to other group companies 2,436 3,101
Total 24,289 20,689
2.7 Other short-term liabilities
CHF 1,000 31.12.2018 31.12.2017
Liabilities due to third parties 4,835 10,147
Article 959c(2)(7) Liabilities due to pension fund 120 112 CO Article 959a(4) Liabilities due to governing bodies (board of directors and auditors) 45 30 CO Total 5,000 10,289
2.8 Long-term interest-bearing liabilities
CHF 1,000 31.12.2018 31.12.2017
Article 959a(4) Loans from companies in which the entity holds an investment 17,500 17,000 CO Bank loans 20,860 17,500
Other interest-bearing liabilities due to third parties 2,929 6,656
Total 41,289 41,156
Overview by maturity:
AArticle 961a(1) CHF 1,000 31.12.2018 31.12.2017 CO Disclosure Up to five years 5,089 5,156 requirements for larger companies More than five years 36,200 36,000
Total 41,289 41,156
2.9 Share capital and reserves from capital contributions On 30 April 2018, the company increased its share capital by CHF 9,000k (par value CHF 2,500k, reserves from capital contributions CHF 6,500k). As at 31.12.2018, the share capital consists of 170,000 registered shares at a par value of CHF 100 each.
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2.10 Treasury shares
Number of registered shares 2018 2017 Article 959c(2)(4) and (5) CO Inventory as at 1.1. 157 3,209
Acquisitions 77 0
Sales 0 –2,260
Allocation to board members and employees 0 –792
Inventory as at 31.12. 234 157
In 2018, 77 registered shares were purchased at the price of CHF 300 each. In 2017, 2,260 registered shares were sold and 792 registered shares were allocated to board members and employees. The average selling price was CHF 280 each.
In 2016, a subsidiary acquired 1,643 registered shares of Industry Ltd at a price of CHF 280 each. A respective reserve for treasury shares was recorded.
2.11 Revenue from sale of goods and services
CHF 1,000 2018 2017
Revenue from the sale of goods 153,827 127,058
Revenue from the delivery of services 12,817 10,453
Total 166,644 137,511
2.12 Non-operating income and expenses Non-operating income and expenses include rental income and relevant costs related to non-operating properties.
2.13 Extraordinary expenses Article 959c(2)(12) Extraordinary expenses of CHF 350k relate to the costs of the clean-up after the storm in August 2018, CO which destroyed part of the production facility.
13 3. OTHER INFORMATION
3.1 Net release of hidden reserves
Article 959c(1)(3) CHF 1,000 2018 2017 CO Total net release of hidden reserves 0 1,789
Article 959c (2)(2) 3.2 Full-time equivalent employees CO The annual average number of full-time equivalent employees for the reporting year, as well as the previous year, exceeded 250.
3.3 Residual amount of leasing obligations The maturity of leasing obligations which have a residual term of more than twelve months or which cannot be canceled within the next twelve months is as follows:
Article 959c(2)(6) CHF 1,000 31.12.2018 31.12.2017 CO Up to 1 year 2,543 3,125
1–5 years 1,783 1,955
More than 5 years 341 657
Total 4,667 5,737
These amounts include payments related to rental or leasing contracts up to the end of their (a) contract period or (b) notice period, as applicable.
Article 959c (2)(8) 3.4 Collateral for third-party liabilities CO Collateral provided for liabilities of third parties amounts to CHF 12,500k (previous year: CHF 13,000k). These are guarantees issued on behalf of subsidiaries.
Article 959c(2)(9) 3.5 Assets pledged to secure own liabilities, as well as assets with retention of title CO Assets pledged to secure own liabilities amount to CHF 50,000k (previous year: CHF 40,000k). They are pledged to secure interest-bearing liabilities. None of the company’s assets bear a retention of title.
Article 959c(2)(10) 3.6 Contingent liabilities CO In summer 2017, a court case was initiated against the company in regard to a product liability incident. The plaintiff is claiming compensation amounting to CHF 3,000k. An initial decision by court is expected for summer 2019. The company expects the case to be dismissed. Provisions have been recorded to cover the expected expenses.
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3.7 Shares or options on shares for members of the board and employees Article 959c(2)(11) In 2018, no shares or options on shares were allocated to members of the board or to employees. CO The following information relates to the allocation in 2017 (valued at the tax value of CHF 250 for each share):
2017 Shares Optionen Total Quantity Value Quantity Wert Value CHF 1,000 CHF 1,000 CHF 1,000 Allocated to board members 360 90 0 0 90
Allocated to employees 432 108 0 0 108
Total 792 198 0 0 198
3.8 Audit fees
CHF 1,000 2018 2017 Article 961a(2) CO Audit services (stand-alone financial statements and consolidated financial 120 110 Disclosure statements) requirements for larger companies Other services 15 15
Total 135 125
3.9 Significant subsequent events Article 959c(2)(13) The investment in Betatechnik AG was sold to a third party as at 20 January 2019. The transaction CO resulted in a gain on sale of approximately CHF 500k.
15 Illustrative example of annual financial statements of Holding Ltd, Zurich
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Article 959c(2)(1) Balance sheet CO
ASSETS
CHF 1,000 Notes 31.12.2018 31.12.2017 Article 950a(1) CO Cash and cash equivalents 8,838 9,834
Securities listed on a stock exchange 233 2 74 Other short-term receivables • from third parties 105 51 • from companies in which the entity holds an investment 10,132 15,089 Article 950a(4) CO Prepaid expenses and accrued income 2.1 989 961
Total current assets 20,297 26,209
Financial assets 2.2 104,226 101,824
Investments 2.3 201,530 201,530
Property, plant and equipment 52 65
Prepaid expenses and accrued income 2.1 1,519 2,439
Total non-current assets 307,327 305,858
TOTAL ASSETS 327,624 332,067
LIABILITIES AND SHAREHOLDERS’ EQUITY
CHF 1,000 Notes 31.12.2018 31.12.2017 Article 959a(2) CO Trade accounts payable 151 256 Other short-term liabilities due to companies in which 1,241 806 the entity holds an investment Short-term provisions 2.4 0 405
Accrued expenses and deferred income 273 53
Total short-term liabilities 1,665 1,520
Long-term interest-bearing liabilities • from third parties 2.5 167,646 181,785 Article 959a(4) • due to shareholders 2.5 8,000 8,000 CO Total long-term liabilities 175,646 189,785
Total liabilities 177,311 191,305
Share capital 2.6 35,000 35,000 Legal capital reserves • Reserves from capital contributions 2.7 16,853 26,845 • Other capital reserves 18,264 18,264 Legal retained earnings • Reserves for treasury shares 2.8 785 785 Voluntary retained earnings • Available earnings – Profit brought forward 60,341 41,460 – Results for the year 19,468 18,881 Treasury shares 2.9 –398 –473
Total shareholders’ equity 150,313 140,762
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 327,624 332,067
17 Income statement
OPTION 1: PRESENTATION FOCUSED ON THE COMPANY’S BUSINESS PURPOSE
Articles 958d as CHF 1,000 Notes 2018 2017 well as 959b(2) CO Dividend income 2.10 21,743 21,032
Other financial income 2.11 5,197 5,091
Other operating income 23 17
Total income 26,963 26,140
Financial expenses 2.12 –4,189 –4,074
Personnel expenses –635 –678
Other operating expenses 2.13 –2,569 –2,281
Impairment losses on investments 0 –120
Depreciation on property, plant and equipment –13 –27
Direct taxes –89 –79
Total expenses –7,495 –7,259
Profit for the year 19,468 18,881
OPTION 2: PRESENTATION FOCUSED ON THE LEGAL MINIMUM REQUIREMENTS FOR STRUCTURE
Articles 958d as CHF 1,000 Notes 2018 2017 well as 959b(2) CO Other operating income 23 17
Dividend income 2.10 21,743 21,032
Other financial income 2.11 5,197 5,091
Total income 26,963 26,140
Personnel expenses –635 –678
Other operating expenses 2.13 –2,569 –2,281
Impairment losses on investments 0 –120
Depreciation on property, plant and equipment –13 –27
Financial expenses 2.12 –4,189 –4,074
Direct taxes –89 –79
Total expenses –7,495 –7,259
Profit for the year 19,468 18,881
Note: the income statement may also be presented in other appropriate ways other than the options 1 and 2 illustrated above.
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Possible alternative: income statement in vertical format
OPTION 1: PRESENTATION FOCUSED ON THE COMPANY’S BUSINESS PURPOSE
CHF 1,000 Notes 2018 2017 Articles 958d as well as 959b(2) Dividend income 2.10 21,743 21,032 CO
Other financial income 2.11 5,197 5,091
Other operating income 23 17
Total operating income 26,963 26,140
Financial expenses 2.12 –4,189 –4,074
Personnel expenses –635 –678
Other operating expenses 2.13 –2,569 –2,281
Operating result before taxes, depreciation and impairment losses 19,570 19,107 Impairment losses on investments 0 –120
Depreciation on property, plant and equipment –13 –27
Profit for the year before taxes 19,557 18,960
Direct taxes –89 –79
Profit for the year 19,468 18,881
OPTION 2: PRESENTATION FOCUSED ON THE LEGAL MINIMUM REQUIREMENTS FOR STRUCTURE
CHF 1,000 Notes 2018 2017 Articles 958d as well as 959b(2) Other operating income 23 17 CO
Total operating income 23 17
Personnel expenses –635 –678
Other operating expenses 2.13 –2,569 –2,281
Operating result before financial result, taxes,depreciation and impairment losses –3,181 –2,942 Impairment losses on investments 0 –120
Depreciation on property, plant and equipment –13 –27
Operating results before financial result and taxes –3,194 –3,089
Dividend income 2.10 21,743 21,032
Other financial income 2.11 5,197 5,091
Financial expenses 2.12 –4,189 –4,074
Profit for the year before taxes 19,557 18,960
Direct taxes –89 –79
Profit for the year 19,468 18,881
Note: The income statement may also be presented in other appropriate ways other than the options 1 and 2 illustrated above.
19 Notes
Article 959c(1)(1) 1. PRINCIPLES CO 1.1 General aspects These annual financial statements were prepared according to the principles of the Swiss Law on Accounting and Financial Reporting (32nd title of the Swiss Code of Obligations). Where not prescribed by law, the significant accounting and valuation principles applied are described below.
Article 960b(1) 1.2 Securities listed on a stock exchange and (2) Securities with a short-term holding period are valued at their quoted market price as at the balance CO sheet date. A valuation adjustment reserve has not been accounted for.
1.3 Financial assets Financial assets include long-term loans. Loans granted in foreign currencies are translated at the rate at the balance sheet date, whereby unrealized losses are recorded but unrealized profits are not recognized.
1.4 Treasury shares Treasury shares are recognized at acquisition cost and deducted from shareholders› equity at the time of acquisition. In case of a resale, the gain or loss is recognized through the income statement as financial income or financial expense.
1.5 Share-based payments Should treasury shares be used for share-based payment programs for board members, the difference between the acquisition costs and any consideration paid by the employees at grant date is recognized as personnel expenses.
1.6 Long-term interest-bearing liabilities Interest-bearing liabilities are recognized in the balance sheet at nominal value. Discounts and issue costs for bonds are recognized as prepaid expenses and amortized on a straight-line basis over the bond’s maturity period. Premiums are recognized as accrued expenses and amortized on a straight-line basis over the bond’s maturity period.
Article 961d(1) 1.7 Foregoing a cash flow statement and additional disclosures in the notes CO As Holding Ltd has prepared its consolidated financial statements in accordance with a recognized accounting standard (Swiss GAAP FER), it has decided to forego presenting additional information on interest-bearing liabilities and audit fees in the notes as well as a cash flow statement in accordance with the law.
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2. INFORMATION ON BALANCE SHEET AND INCOME STATEMENT ITEMS Article 959c(1)(2) CO 2.1 Prepaid expenses and accrued income Long-term prepaid expenses and accrued income contain the not-yet-amortized amount of the discount and the issue costs which arose when the bond was issued. The part to be amortized in the following year is recognized in the short-term prepaid expenses and accrued income.
2.2 Financial assets
CHF 1,000 31.12.2018 31.12.2017
Loans granted to companies in which the entity holds an investment 104,226 101,824 Article 959a(4) CO Total 104,226 101,824
2.3 Investments
Share in voting and capital Article 959c(2)(3) Company Domicile Capital in 1,000 rights, in % CO 31.12.2018 31.12.2017 31.12.2018 31.12.2017
Alpha AG Zurich CHF 100 CHF 100 100 100
Beta B.V. Amsterdam EUR 1,000 EUR 1,000 75 75
Gamma GmbH Hamburg EUR 1,000 EUR 1,000 100 100
Delta SpA Rome EUR 2,000 EUR 2,000 100 100 30 30 Epsilon SA Paris EUR 2,500 EUR 2,500 (indirectly (indirectly held) held)
2.4 Short-term provisions The previous year’s short-term provisions related to a conditional purchase price for the acquisition of an investment.
21 2.5 Long-term interest-bearing liabilities
CHF 1,000 31.12.2018 31.12.2017
Bonds 145,000 145,000
Bank loans 22,646 36,785
Article 959a(4) Loans from shareholders 8,000 8,000 CO Total 175,646 189,785
Loan conditions:
Article 959c(4) CHF 20,000k CHF 60,000k CHF 65,000k CO 2015-2020 2016-2021 2017-2022 Nominal value as at 31.12.2018 20,000 60,000 65,000 (CHF 1,000) Nominal value as at 31.12.2017 20,000 60,000 65,000 (CHF 1,000) Interest rate in % 1.25 1. 0 0 2.00
Duration in years 5 5 5
Maturity 30.06.2020 31.10.2021 31.03.2022
2.6 Share capital and authorized capital Share capital in the amount of CHF 35,000k consists of 4,375,000 registered shares at a par value of CHF 8.00 each.
At the Annual General Meeting of 1 May 2017, the Board of Directors was authorized to increase the share capital by a maximum of CHF 8,000k, split into 1,000,000 registered shares at a par value of CHF 8.00 each, by 30 April 2019 at the latest.
2.7 Reserves from capital contributions The reserves from capital contributions include the premium from capital increases in the years 2008 and 2009, minus the dividends distributed to date.
From a fiscal point of view, any distributions made from reserves from capital contributions are treated the same as a repayment of share capital. The Swiss Federal Tax Administration (SFTA) has confirmed that it will recognize disclosed reserves from capital contributions as a capital contribution as per Article 5(1bis) Withholding Tax Act.
Article 959c(2)(4) 2.8 Reserves for treasury shares and (5) In 2011, a subsidiary acquired 4,361 registered shares of Holding Ltd at a price of CHF 180 each. CO A respective reserve for treasury shares was recorded.
22 KPMG | The Swiss Law on Accounting and Financial Reporting Illustrative financial statements
2.9 Treasury shares Article 959c(2)(4) and (5) CO Number of registered shares Number of Lowest rate Highest rate Average Quantity transactions in CHF in CHF rate of †ransaction in CHF
Inventory as at 1.1.2017 3,210
Acquisitions 5 240 246 243 1,540
Sales 4 249 251 250 –1,580
Allocation to board members 1 244 –1,255
Inventory as at 31.12.2017 1,915
Acquisitions 3 239 246 243 1,365
Sales 2 250 253 252 –355
Allocation to board members 1 242 –1,305
Inventory as at 31.12.2018 1,620
As at balance sheet date, acquisition cost for directly held treasury shares amounted to CHF 398k (previous year: CHF 473k).
2.10 Dividend income In the reporting year, dividend income amounted to CHF 21,743k (previous year: CHF 21,032k). This amount included dividends distributed by Alpha AG in the amount of CHF 8,000k for the 2018 business year. The dividends were recorded as a receivable. This approach is permitted since Alpha AG closes its accounts on the same balance sheet date, and its Annual General Meeting has already approved the dividend.
2.11 Other financial income Other financial income amounts to CHF 5,197k (previous year: CHF 5,091k) and consists mostly of interest income from loans to companies in which the entity holds an investment.
2.12 Financial expenses
CHF 1,000 31.12.2018 31.12.2017
Bank interest and fees 685 1,103
Interest to shareholders 310 310
Interest on bonds 2,150 1,825
Amortization of discounts and issue costs 920 820
Exchange losses 124 16
Total 4,189 4,074
23 2.13 Other operating expenses
CHF 1,000 31.12.2018 31.12.2017
Administrative expenses 1,101 987
Consulting expenses 896 1,110
Other operating expenses 572 184
Total 2,569 2,281
3. OTHER INFORMATION
Article 959c(2)(2) 3.1 Full-time equivalents CO Holding Ltd does not have any employees.
Article 959c(2)(8) 3.2 Collateral for third-party liabilities CO Collateral provided for liabilities of third parties amounts to CHF 12,500k (previous year: CHF 13,000k). These are sureties, letters of comfort and guarantees issued in favor of subsidiaries.
Article 663c 3.3 Significant shareholders CO The following shareholders owned more than 5 percent of voting rights as at 31 December: Disclosure requirement for listed entities Voting rights as at Voting rights as at Shareholder 31.12.2018 31.12.2017 Hans Muster 10.34% 10.33%
Thomas Muster 7.25% 7.73%
Beate Muster 6.69% 6.69%
Finanzgesellschaft ABC AG 5.35% 5.10%
There is a shareholders’ agreement for the shareholder group of the Muster family (11 members). As at 31 December 2018, the shareholder group possessed a total of 42.27 percent (previous year: 44.59 percent) of share capital and voting rights of Holding Ltd.
24 KPMG | The Swiss Law on Accounting and Financial Reporting Illustrative financial statements
3.4 Equity owned by Group Management and the Board of Directors, including any related parties
Number of shares Number of shares Board of Directors Article 663c as at 31.12.2018 as at 31.12.2017 CO Hans Muster, Chairman of the Board of Directors 452,170 451,900 Disclosure requirement for Heinrich Huber, Deputy Chairman of the Board of Directors 98,827 98,562 listed entities
Anita Lehmann, Board member 12,385 12,125
Elisabeth Graf, Board member 33,822 33,562
Walter Hofmann, Board member 46,837 46,587
Number of shares Number of shares Group Management as at 31.12.2018 as at 31.12.2017 Peter Müller, CEO 52,124 46,257
Beate Muster, CFO 292,815 292,815
None of the members of the Board or Management hold conversion or option rights.
3.5 Shares or options on shares for members of the board According to the compensation plan, Board members‘ fees are paid in shares at a minimum of 30 percent and up to a maximum of 50 percent. Treasury shares are used for share-based compensation. The number of shares is calculated based on the average share price over the last ten days prior to the allocation.
The allocation was as follows:
Article 959c(2)(11) 2018 2017 CO Quantity Value Quantity Value CHF 1,000 CHF 1,000 Allocated to members of the board 1,305 316 1,255 306
Article 959c(2)(13) 3.6 Significant events after the balance sheet date CO There are no significant events after the balance sheet date which could impact the book value of the assets or liabilities or which should be disclosed here.
25 Illustrative financial statements of Non-Profit Foundation, Zurich
26 KPMG | The Swiss Law on Accounting and Financial Reporting Illustrative financial statements
Article 959c(2)(1) Balance sheet CO
ASSETS Article 959a(1) CO
CHF 1,000 Notes 31.12.2018 31.12.2017
Cash and cash equivalents 2.1 5,221 3,892
Other short-term receivables 369 257
Prepaid expenses and accrued income 224 89
Total short-term assets 5,814 4,238
Financial assets 2.2 9,957 8,951
Valuation adjustment reserve 2.2 –1,590 –987 Article 960b(2) CO Property, plant and equipment 2.3 3,456 3,836
Total non-current assets 11,823 11,800
TOTAL ASSETS 17,637 16,038
LIABILITIES AND SHAREHOLDERS’ EQUITY
CHF 1,000 Notes 31.12.2018 31.12.2017 Article 959a(2) CO Trade accounts payable 156 154
Other short-term liabilities 358 479
Accrued expenses and deferred income 2,044 1,459
Total short-term liabilities 2,558 2,092
Long-term interest-bearing liabilities 2.4 1,500 1,500
Total long-term liabilities 1,500 1,500
Total liabilities 4,058 3,592
Foundation capital 10,000 10,000
Voluntary retained earnings • Available earnings – Profit brought forward 2,446 501 – Proift for the year 1,133 1,945 Total equity 13,579 12,446
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 17,637 16,038
27 Income statement
Article 959b(2) CHF 1,000 Notes 2018 2017 CO Donations received 2.5 27,258 28,241
Other operating income 468 587
Total operating income 27,726 28,828
Contributions and donations paid 2.6 –22,103 –21,993
Personnel expenses –881 –793
Other operating expenses 2.7 –3,608 –3,698 Depreciation and impairment losses on property, plant and –380 –401 equipment Operating result 754 1,943
Financial income 2.8 1,093 799
Financial expenses 2.9 –714 –797
Profit for the year 1,133 1,945
28 KPMG | The Swiss Law on Accounting and Financial Reporting Illustrative financial statements
Notes
1. PRINCIPLES Article 959c(1)(1) CO
1.1 General aspects These annual financial statements were prepared according to the principles of the Swiss Law on Accounting and Financial Reporting (32nd title of the Swiss Code of Obligations). Where not prescribed by law, the significant accounting and valuation principles applied are described below.
1.2 Financial assets Article 960b(1) and (2) The securities in investments are valued at quoted market price or another observable market price as CO at the balance sheet date. In order to account for fluctuations in value, the entity records a valuation adjustment reserve, which amounts to the difference between the market price as at balance sheet date and lower historical acquisition cost.
1.3 Property, plant and equipment Property, plant and equipment (PPE) is valued at acquisition or manufacturing costs less accumulated depreciation and impairment losses. With the exception of land, PPE is depreciated using the straight-line method. If there is an indication of impairment, the carrying amounts are reassessed and, where necessary, adjusted.
The estimated useful lives of PPE are as follows:
Plots of land unlimited Buildings 50 years Equipment, furniture 5 years
29 Article 959c(1)(2) 2. INFORMATION ON BALANCE SHEET AND INCOME STATEMENT ITEMS CO 2.1 Cash and cash equivalents Cash and cash equivalents include cash in hand, postal and bank accounts.
2.2 Financial assets
CHF 1,000 31.12.2018 31.12.2017
Bonds in CHF 4,156 4,589
Bonds in foreign currencies 967 1,514
Domestic shares 2,958 1,925
Foreign shares 1,876 923 Total financial assets at quoted market price or another observable market 9,957 8,951 price Valuation adjustment reserve –1,590 –987
Total acquisition cost for financial assets 8,367 7,964
2.3 Property, plant and equipment
CHF 1,000 31.12.2018 31.12.2017
Land and buildings 2,919 3,157
Equipment, furniture 546 679
Total 3,465 3,836
2.4 Long-term interest-bearing liabilities The long-term interest-bearing liability is a mortgage granted by Bank X.
2.5 Donations received
CHF 1,000 2018 2017
Contributions by sponsors 9,689 8,547
Donations and endowments 17,569 19,694
Total 27,258 28,241
2.6 Contributions and donations paid
CHF 1,000 2018 2017
Support for hardship cases 9,890 8,547
Counselling and support in emergencies 6,524 7,105
Project contributions 5,689 6,341
Total 22,103 21,993
30 KPMG | The Swiss Law on Accounting and Financial Reporting Illustrative financial statements
2.7 Other operating expenses
CHF 1,000 2018 2017
Public relations, advertising 1,447 1,801
IT expenses 401 568
Property maintenance (maintenance, repairs, third-party services) 541 302
General administrative expenses 1,219 1,027
Total 3,608 3,698
2.8 Financial income
CHF 1,000 2018 2017
Interest and dividend income 258 235
Price gains on financial assets 835 62
Decrease in valuation adjustment reserves 0 502
Total 1,093 799
2.9 Financial expenses
CHF 1,000 2018 2017
Interest rate expenses 75 75
Fees and charges 6 5
Price losses on financial assets 30 717
Increase in valuation adjustment reserves 603 0
Total 714 797
3. OTHER INFORMATION
3.1 Full-time equivalents Article 959c(2)(2) The annual average number of full-time equivalent employees for the reporting year, as well as the CO previous year, did not exceed 10.
3.2 Assets pledged to secure own liabilities Article 959c(2)(9) With a book value of CHF 2,919k (previous year: CHF 3,157k), land and buildings are encumbered with CO mortgages amounting to CHF 1,500k (previous year: CHF 1,500k).
3.3 Significant events after the balance sheet date Article 959c(2)(13) There are no significant events after the balance sheet date which could impact the book value of the CO assets or liabilities or which should be disclosed here.
31 Annex KPMG | The Swiss Law on Accounting and Financial Reporting Illustrative financial statements Disclosure checklist
1. Rules concerning annual financial statements (stand-alone financial statements)
1.1 General Provisions
Reference in CO Control question Ye s N/A No Comment
Article 958(2) The financial reporting forms part of the annual report which contains the financial statements. Do the financial statements consist of the balance sheet, the income statement and the notes?
Article 958a(2) If it is intended to discontinue all or part of the entity’s activities – or if such a discontinuation cannot be averted – within twelve months from the balance sheet date: is the accounting for the business activities concerned based on liquidation values?
Article 958a(2) If it is intended to discontinue all or part of the entity’s activities – or if such a discontinuation cannot be averted – within twelve months from the balance sheet date: have provisions been recorded for expenditures associated with the discontinuation?
Article 958b(1) Has the cut-off (accrual accounting) of expenses and income been properly performed? Note: Provided the net proceeds from the sale of goods or services or financial income does not exceed CHF 100,000, a company may use cash accounting (“expenditure and income”) instead of accrual accounting (Art. 958b(2) CO).
Article 958d(1) Are the balance sheet and the income statement presented either in the account form or in the report form?
Article 958d(2) Do the financial statements present the current period and the corresponding prior period figures? Note: Answer “n/a” only possible for newly founded entities.
Article 958d(3) Are the financial statements presented in either Swiss francs or the currency relevant to the entity’s business activities (functional currency)?
Article 958d(3) If presented in a currency other than Swiss francs: are all the amounts of the balance sheet, the income statement, the notes and the cash flow statement (if applicable) additionally disclosed in Swiss francs?
Article 958d(4) Is the financial reporting presented in either an official language of Switzerland or in English?
33 1.2 Balance sheet
Reference in CO Control question Ye s N/A No Comment
Article 959a(1) Does the balance sheet as a minimum present the following line items separately on the asset side?
Current assets • Cash (and cash equivalents) and assets with a quoted market price held for a short-term • Trade accounts receivable • Other short-term receivables • Inventories and non-invoiced services • Prepaid expenses and accrued income
Non-current assets • Financial assets • Investments • Property, plant and equipment • Intangible assets • Not yet paid-in share capital, partners’ capital or endowment capital
Are the above line items presented in the prescribed sequence?
Article 959a(2) Does the balance sheet as a minimum present the following line items separately on the liability/shareholders’ equity side?
Current liabilities • Trade accounts payable • Short-term interest-bearing liabilities • Other short-term liabilities • Accrued expenses and deferred income
Non-current liabilities • Long-term interest-bearing liabilities • Other long-term liabilities • Provisions and similar items according to the law
Shareholders’ equity • Share capital, partners’ capital or foundation capital, if applicable separately per category • Legal capital reserves Note: Possible sub-items: – (Fiscal) reserves from capital contributions – Other capital reserves • Legal retained earnings Note: Possible sub-items: – General legal reserves – Revaluation reserves – Reserves for treasury shares (only for shares held in subsidiaries) • Voluntary retained earnings or accumulated losses Note: Possible sub-items: – Free and statutory retained earnings – Available earnings – Accumulated profits/losses brought forward – Net loss/profit for the year • Treasury shares (as a negative amount)
Are the above line items presented in the prescribed sequence?
34 KPMG | The Swiss Law on Accounting and Financial Reporting Illustrative financial statements
Reference in CO Control question Ye s N/A No Comment
Article 959a(3) To the extent that it is material for the assessment of the financial position of the entity by third parties or common practice in the entity’s business area: are other items presented separately either in the balance sheet or in the notes to the financial statements?
Article 959a(4) Are the following receivables and liabilities disclosed separately either in the balance sheet or in the notes to the financial statements?
• Receivables due from/liabilities due to direct or indirect holders of equities
• Receivables due from/liabilities due to governing bodies Note: The law does not precisely state whether receivables due from and liabilities due to governing bodies should be disclosed separately or if they can be presented together (within the same line item) with the receivables due from/payables due to direct or indirect holders of equities. The HWP 2014 does not provide further guidance either.
• Receivables due from/liabilities due to entities in which the entity holds an investment, either directly or indirectly
Article 959(3) Do current assets comprise only cash and other assets that are probably turned into cash or otherwise realized within one year from the balance sheet date or during the normal business cycle?
Article 959(6) Do current liabilities comprise all the liabilities that will be payable within one year from the balance sheet date or within the normal business cycle?
Article 959(7) Is shareholders’ equity presented and structured according to the entity’s legal form?
35 1.3 Income statement
Reference in CO Control question Ye s N/A No Comment
Article 959b(2) If the income statement is presented by function of production: are the following line items, as a minimum, presented separately?
• Net revenue from the sale of goods and services • Changes in inventory of finished goods and work in progress as well as non-invoiced services • Raw materials and supplies • Personnel expenses • Other operating expenses • Amortization and value adjustments on items in non-current assets • Financial expenses • Financial income • Non-operating expenses • Non-operating income • Extraordinary, non-recurring or prior period expenses • Extraordinary, non-recurring or prior period income • Direct taxes • Profits/Loss for the year (net)
Are the above line items presented in the prescribed sequence?
Article 959b(3) If the income statement is presented by function of expense: are the following line items, as a minimum, presented separately?
• Revenue from sale of goods and services • Purchase or production costs of sold products or services • Administrative expenses and distribution costs • Financial expenses • Financial income • Non-operating expenses • Non-operating income • Extraordinary, non-recurring or prior period expenses • Extraordinary, non-recurring or prior period income • Direct taxes • Profits/Loss for the year (net)
Are the above line items presented in the prescribed sequence?
Article 959b(5) To the extent that it is material for the assessment of the results of operations of the business by third parties or common practice in the entity’s industry: are other items presented separately either in the income statement or in the notes to the financial statements?
36 KPMG | The Swiss Law on Accounting and Financial Reporting Illustrative financial statements
1.4 Notes
Reference in CO Control question Ye s N/A No Comment
Article 959c(3) Only sole proprietorships and partnerships
Article 959c(3) For sole proprietorships or partnerships that are not required to comply with the requirements for larger entities: if the requirement to prepare notes has been waived, is information additionally required as a minimum structure of the balance sheet and the income statement presented directly in the balance sheet or the income statement?
Article 959c(1) Do the notes contain the following information? (1)-(3)
Article 959c(1)(1) 1. Description of the accounting policies applied in the preparation of the financial statements, to the extent these are not prescribed by law
Article 959c(1)(2) 2. Disclosure and breakdown and explanations on balance sheet and income statement line items
Article 959c(1)(3) 3. The total amount of replacement reserves used and the additional hidden reserves, if this exceeds the total amount of new reserves of the same type where the result achieved thereby is considerably more favorable
Article 959c(1)(4) Do the notes also disclose the other information required by law?
Article 958a(3) 1. If the entity intends to discontinue all or part of its business activities - or if such a discontinuation cannot be averted - within twelve months from the balance sheet date: is the deviation from the going concern assumption disclosed and its influence on the financial position of the business explained?
Article 958d(3) 2. If presented in a currency other than Swiss francs: are the conversion rates disclosed and if necessary explained?
Article 959b(4) 3. If the income statement is presented with the cost-of-sales method: are personnel expenses and, as a single item, depreciation and impairment losses on non-current assets disclosed?
Article 959c(4) 4. If the company has bonds outstanding: is the following disclosed:
• Amount • Interest rate • Maturities • Other terms and conditions such as subordination, conversion, options, collateral, private placements, early repayment clauses, restrictions, etc.
5. If assets are valued at quoted market prices or other observable market prices:
Article 960b(1) • Do the notes disclose this valuation? Article 960b(1) • Is the total value of the respective assets disclosed, separately for securities and other assets with an observable market price? Article 960b(2) • Is the amount of the fluctuation reserve disclosed separately in either the balance sheet or the notes to the financial statements?
37 Reference in CO Control question Ye s N/A No Comment
Article 663c(1) 6. If the company shares are listed at a stock exchange:
• Are major shareholders and their equity holdings Article 663c(3) disclosed? • Are the investments in the company as well as any conversion and option rights held by each member of the board of directors, the management board, and the advi- sory board, (including investments of persons related to these members) disclosed, giving their name and position?
Article 670 7. If revaluations exceeding the historical costs were made: Article 671b is information on the subject and the amount of any revaluations disclosed
8. If applicable: are any other disclosures required by other (special) laws (e.g. Merger Act)?
Article 959c(1) Is the following information disclosed in the notes or (1)-(14) has it already been included in the balance sheet or in the income statement?
Article 959c(1)(1) 1. General aspects Do the notes contain the following information: • Company name? • Legal form? • Domicile?
Article 959c(2)(2) 2. Full-time equivalent employees Do the notes declare whether full-time equivalents, on an annual average, exceed 10, 50 or 250, respectively?
Article 959c(2)(3) 3. Investments Do the notes contain a list of all entities in which the company holds direct or significant indirect investments, showing the following informationt?
• Company • Legal form • Domicile/country • Share in voting and capital rights (in %)
Article 959c(2)(4) 4. Treasury shares Do the notes contain:
• The number of treasury shares held by the entity itself? • The number of treasury shares held by entities in which the entity holds investments?
Article 959c(2)(5) 5. Treasury shares Do the notes contain information on the purchases and sale of treasury shares, including terms and conditions, as well as:
• opening balance • purchase • sale • closing balance • terms and conditions of purchases • terms and conditions of sales
Article 959c(2)(6) 6. Lease obligations Do the notes disclose the residual liabilities arising from leasing transactions which are similar to sales contracts and other leasing obligations, unless these expire or can be canceled within 12 months after the balance sheet date?
38 KPMG | The Swiss Law on Accounting and Financial Reporting Illustrative financial statements
Reference in CO Control question Ye s N/A No Comment
Article 959c(2)(7) 7. Liabilities to pension funds Do the notes disclose liabilities to pension schemes?
Article 959c(2)(8) 8. Collateral for third-party liabilities Do the notes disclose the total amount of the collateral provided for third-party liabilities?
Article 959c(2)(9) 9. Securing own liabilities Are the following amounts disclosed in the notes?
• Assets pledged to secure own liabilities • Assets put under ownership reservation
Article 959c(2)(10) 10. Contingent liabilities Do the notes disclose the legal or actual obligations for which a cash outflow is unlikely or cannot be estimated reliably?
Article 959c(2)(11) 11. Shares or options awarded to employees Do the notes contain information about the number and val- ue of shares or options on shares awarded during the period to members of senior management, the supreme governing and administrative body and to employees?
Article 959c(2)(12) 12. Extraordinary and prior-period items Do the notes contain explanations of extraordinary, non-recurring or prior-period items included in the income statement?
Article 959c(2)(13) 13. Events after the balance sheet date Do the notes disclose significant events that occurred after the balance sheet date?
Article 959c(2)(14) 14. Premature resignation of the auditors Do the notes disclose the reasons for a premature resignation of the auditors?
39 2. REQUIREMENTS FOR LARGER ENTITIES
2.1 Additional items to be covered in the annual report
Reference in CO Control question Ye s N/A No Comment
Article 961 Does the annual report also contain the following:
• A cash flow statement (as part of the financial statements)? • A management report?
2.2 Notes
Reference in CO Control question Ye s N/A No Comment
Article 961a Do the notes contain additional information on long-term interest-bearing liabilities, broken down according to the following maturities:
• Due within one to five years • Due in more than five years
Article 961a Are the auditor›s fees disclosed, broken down by:
• Audit-related services and • Other services
2.3 Cash flow statement
Reference in CO Control question Ye s N/A No Comment
Article 961b Does the cash flow statement present the changes in cash and cash equivalents from:
• Operating activities • Investment activities • Financing activities
2.4 Management report
Reference in CO Control question Ye s N/A No Comment
Article 961c(1) Does the management report provide information on the Article 961c(3) business performance and the entity’s financial position, and if applicable, that of the group, as at the end of the year that are consistent with the stand-alone financial state- ments or the consolidated financial
Article 961c(2) Does the management report in particular provide information on:
• Number of full-time equivalents on an annual average • Performance of a risk assessment • Orders and assignments • Research and development activities • Extraordinary events • Outlook
40 KPMG | The Swiss Law on Accounting and Financial Reporting Illustrative financial statements Publications
The Swiss Law The Swiss Law on Accounting on Accounting and Financial and Financial Reporting Reporting
Structured Presentation and Explanation Accounting and fi nancial reporting of the Most Important Provisions in foreign currencies
Defi nition of the functional currency
Changing the currency of the accounting and/or fi nancial reporting
Disclosure of values in Swiss francs
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